Food Without Destruction

This white paper offers a survey of eight strategies businesses along agricultural supply chains, civil-society organizations, investors, and nations are implementing to promote sustainable agricultural commodity production and ease pressures on tropical forests with some promising results, including a 70 percent reduction of deforestation over the past decade in the Brazilian Amazon, one of the largest deforestation hotspots on the planet.

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Executive Summary
The United Nations predicts that to feed the 9 billion people on the planet in 2050, we will have to
increase food production by 70 percent. 1 We should be concerned about such a forecast: agricultural
production today already uses 70 percent of total water withdrawn, 2 and emits about 25 percent of
global greenhouse gas (GHG) emissions, directly, or indirectly through deforestation. 3
Furthermore, a rising middle class in developing countries is fueling a shift to diets richer in animal
products and fats, which in turn creates pressures on farmers to expand agriculture into forests.
Agriculture is already responsible for 85 percent of global deforestation, and cattle ranching, soy (the
vast majority of which is used as animal feed), and palm oil are the three major commodities that
make up most of this deforestation.4
The challenges are daunting. That being said, many actors—supply chain agricultural businesses,
civil society, investors, and governments—have, especially over the past decade, started to act to
address several environmental impacts of agriculture.
In recent years, an increasing number of businesses along agricultural commodity supply chains—
and especially consumer-facing brands—have committed to sustainable sourcing policies,
participated in commodity roundtables, agreed to moratoria on purchasing unsustainably sourced
commodities, and implemented better management practices at the farm level.
A major driver for private sector voluntary action has been the relentless pressure of civil society
organizations, especially through consumer campaigns that publically target consumer-facing
brands, threatening to tarnish their reputations. Civil society organizations have also played an
active role as participants (and often founding members) of commodity roundtables, watchdogs of
compliance with industry moratoria and individual companies’ voluntary sustainable sourcing
commitments, partners in the scaling of improved farming practices and linking of agricultural
offsets with carbon markets, and educators on the risks of investing in unsustainable commodity
supply chains.
As financial actors start to impose environmental criteria on their agricultural investments, some
investors are communicating a preference for financing commodities that are certified as
sustainable, or are in the process of becoming so. In 2013, the largest pension fund in the world
divested from palm oil processing companies whose product was directly causing deforestation, and
several shareholder resolutions filed against major consumer goods companies convinced the latter
to take on zero-deforestation palm oil sourcing policies. In this way the investment sphere has
recently emerged as a new arena for action on sustainable agricultural commodity production.
Consumer nation governments have in recent years implemented some regulations and policies that
support the import of sustainable commodities. Some producer nation governments have advanced
promising forest legislation and policies, yet in some cases they conflict with national expansionary
agricultural policies, and enforcement may be difficult and at times lacking.
Linkages between low-carbon agriculture and carbon markets are also slowly emerging, especially at
a regional level. Examples include California’s cap-and-trade system and China’s city and province

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pilot emissions trading systems. There are also growing efforts to connect the forest finance
mechanism Reducing Emissions from Deforestation and Forest Degradation (REDD+) to sustainable
agriculture.
While the strategies profiled in this paper have led to much progress, we are also starting to see some
of the limits of these approaches, which together currently form a fragmented set of strategies for
halting further environmental impacts such as deforestation.
We hope this paper will inspire all readers to work to create an agricultural system that sustains the
natural environment on which all life in this world depends, while feeding a world with a growing
population and shifting diets.

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SECTION I
Introduction
How can we successfully feed a growing population without destroying our planet in the process?
The United Nations predicts that to feed the 9 to 10 billion people projected to live on this planet by
2050, food supply will have to increase by 70 percent.5 With over 40 percent of arable land already
used for agriculture, cropland infringing upon forests and other fragile ecosystems, and crop yields
projected to increasingly suffer from extreme events driven by climate change, growing enough food
for future populations while maintaining healthy ecosystems upon which all life depends will be a
mammoth challenge.
Yet we don’t need to look ahead to 2050 to be concerned—our current agricultural system already
has major impacts on the global environment. While all stages of the food chain—from agricultural
production, to transport, food consumption, and waste disposal—have environmental footprints, the
greatest impacts are concentrated at the agricultural production stage.
Agricultural production is the largest driver of global deforestation, responsible for 85 percent of
total forest loss (with forestry accounting for an additional 10 percent), and consequently also the
largest driver of biodiversity loss.6 It is also responsible for approximately 25 percent of global
greenhouse gas (GHG) emissions, both directly (from rice, livestock production, fertilizer
application), and indirectly from deforestation.7,8 Furthermore, 70 percent of water withdrawn is
used for agricultural irrigation.9 China and India’s increasing demand for major agricultural
commodities such as soy, which is overwhelmingly used as animal feed, and palm oil demonstrates
that a shift in global diets is already in motion, spelling rising further pressures on forests.
This paper profiles eight strategies that businesses along the agricultural supply chain, civil-society
organizations, governments, and investors are implementing to address environmental impacts of
global agricultural commodity production (Figure 1 shows these strategies’ position in the value
chain, and major flows of influence):
1. Consumer campaigns that publically pressure companies to rid their supply chains of
deforestation and other environmental impacts
2. Voluntary commitments by companies to source agricultural commodities in their supply
chains more sustainably
3. Commodity roundtables and certification—multi-stakeholder platforms where supply
chain actors and civil-society groups discuss how to make a commodity more sustainable
4. Commodity moratoria—agreements by an entire industry to stop sourcing commodities
produced in an unsustainable manner
5. Improved agricultural management practices to reduce direct GHG emissions from
agriculture and ease pressure on forests
6. Investor actions, such as sustainable investment criteria, preferential financing,
divestment, and shareholder advocacy
7. Governmental regulations and policies, including producer country regulations,
consumer country regulations, and sustainable procurement policies
8. Carbon markets and REDD+ (Reducing Emissions from Deforestation and Forest
Degradation)

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Drawing on a literature review of reports, academic research, as well as interviews with 30 experts in
academia, environmental non-profits, industry, intergovernmental organizations, and the finance
sector, the paper provides an overview of the strategies’ implementation, the dynamics among
participating actors, and the strategies’ effectiveness.
Many of the strategies profiled in this paper aim to halt deforestation in the Brazilian Amazon,
driven by soy cultivation and cattle ranching, and in South East Asia, driven by palm oil production
and timber harvesting. These two regions currently stand as the two largest hotspots for
deforestation worldwide, together responsible for over 40 percent of global deforestation.10
The right combination of policies, pressure and action can go far toward ensuring that we can feed
the world’s growing population in a manner that respects essential natural systems. This paper aims
to present the literature in a non-biased and non-prescriptive manner, without endorsing any
particular course of action. We hope this paper will inspire readers to pursue agricultural strategies
that sustain the natural environment on which all life in this world depends.
Figure 1: Value chain strategies to address the environmental impacts of agricultural
commodity production11

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SECTION II
Profiles of Value Chain Strategies
1. Consumer Campaigns
A. Overview of strategy and dynamics among actors
Demand side campaigns, also known in the literature as consumer campaigns, are a strategy
environmental non-profit organizations like Greenpeace, Rainforest Action Network (RAN), and the
World Wildlife Fund (WWF) use to shift demand away from commodity production linked to
deforestation. Grounded in evidence often uncovered through the organizations’ own investigative
efforts, these campaigns trace unsustainably grown soy, cattle, palm oil, and timber down
commodity supply chains to specific traders, manufacturers, or retailers. The non-profits then target
these actors through tactics that raise the visibility of the issue and encourage consumers to pressure
companies to change their sourcing practices. Some consumer campaigns have additional aims of
changing policy and consumer behavior.
The success and effectiveness of this strategy varies. Some campaigns are successful beyond their
initial goals, as was the case with Greenpeace’s 2006 campaign against soy-related deforestation in
the Brazilian Amazon, which brought about the widely praised industry-wide Brazilian Soy
Moratorium. More often, campaigns reach their immediate desired outcome of modifying company
procurement practices, but the impact of these commitments on reducing or halting deforestation is
yet unclear.a Campaigns against timber-driven deforestation in Indonesia, for example, have driven
changes in retailers and other companies’ sourcing policies, but have failed to effect widespread and
concrete changes in production to halt deforestation. The literature and experts characterize
campaigns’ impacts on policy and consumer behavior as being even more limited.
Based on our research, successful campaigns typically share the following three elements. They are:
(1) based on rigorous research, (2) harness media visibility to influence supply chain actors, and (3)
pressure key leverage points in supply chain to shift away from unsustainable practices.
1. Research serves as foundation for campaigns’ successes
Campaigns are often grounded in extensive research,12 drawing from sources like satellite imagery,
previously unreleased government documents, and undercover reporting.13 Research is then typically
compiled into reports that assess the current state of deforestation and other land use practices. The
reports usually highlight illegal deforestation and link unsustainable practices down agricultural
supply chains to specific actors, including well known consumer-facing brands.14
The indispensable role such research plays in campaigns’ successes is underscored in a comment
Karen Van Bergen, Vice President of Corporate Relations for McDonald’s Europe, made in 2006
after meeting with Greenpeace activists who accused the company of sourcing soy from recently
deforested areas in the Brazilian Amazon. Van Bergen acknowledged that Greenpeace “had so much
information and brought concrete facts, [that] there was only one way to address [the situation]”15—
a For more information, see Section 2 on Voluntary Sustainability Commitments.

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by taking action, which McDonald’s promptly did, in this way catalyzing the creation of the Soy
Moratorium.b
Other cases of companies changing their sourcing policies in response to civil-society campaigns
have reinforced the role research plays, if not in convincing targeted companies of the truth of
incriminating claims, at least in convincing them that the public will believe the allegations, placing
their public image at risk. Likewise, companies that refuse to comply with the non-profits’ demands
often back their decision by dismissing the allegations against them.16
NGO research may sometimes yield impacts beyond the original campaign’s goals. One academic we
consulted noted that Greenpeace, drawing on its network of on-the-ground activists, was the first to
demonstrate the link between soy and beef production and deforestation in the Brazilian Amazon,
and to then link these product to specific supply chain actors—a challenge that had previously eluded
academics who had attempted it. She described Greenpeace’s research and campaigns as “opening
the floodgates” validating the academic research that also highlights this connection.
2. Media visibility and public opinion influence supply chain actors
Armed with evidence uncovered by research, campaigns harness their global networks of activists to
raise the visibility of issues in mainstream and social online media, and call on consumers to
pressure companies to change their practices.
In the 1980s and 1990s, non-profits typically asked consumers to boycott specific products or
brands. While there are several examples of successful consumer boycotts—such as a 1987 RAN
boycott against Burger King, which triggered a 12 percent drop in the company’s sales and led the
company to halt sourcing beef from rainforest regions17—the literature highlights many challenges
boycotts face that make it difficult for them to achieve lasting results.18 One critic characterized the
boycott strategy as a “war of attrition.”19
The last decade has seen a shift in strategy, captured well by a Greenpeace activist’s comment on the
group’s 2008 campaign against companies implicated in palm oil deforestation in Indonesia:
“We believe environmentalists and Greenpeace supporters can be more effective if we
pressure Unilever to change, by exposing the truth about palm oil and showing that
we care. Like a negative restaurant review is more damaging than no review at all -
Unilever is more sensitive to public exposure and debate than a consumer boycott.”20
Recent consumer campaigns aim to affect corporate practices not by attempting to temporarily affect
sales, but by attacking a company’s reputation as a law-upholding and ethical player. While such a
strategy might eventually affect sales, most companies that have responded to campaigns have
chosen to respond preemptively to avoid damage to their image.
Social media has been a key driver of this transformation in campaign tactics. Online platforms such
as Twitter, Facebook, and YouTube have allowed campaigns to exponentially expand their visibility,
as well as directly and instantaneously reach out to consumers and target companies. Social media
b For additional information, see Section 4 on Commodity Moratoria.

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has allowed campaigns to become more effective at getting consumers to act, as they no longer ask
them to change their consumption practices21 but instead to express their support online.22
Greenpeace’s 2011 campaign against Kit Kat—detailed below—for its use of palm oil linked to
deforestation in Indonesia, illustrates the role social media can play. The social media components of
this campaign included a video, which garnered over 1.5 million views on YouTube,23 and Twitter
and Facebook portals that facilitated sending over 200,000 messages to Nestle to demand change. In
response to this outpouring of online activism, Nestlé announced a policy to eliminate all
deforestation from its palm oil supply chain.24
Following are three examples of tactics campaigns have used to create media visibility and gain
public support for their demands:
• Disseminate catchy online campaign materials: These materials, including videos,
repackage the reports’ findings and demands in a compelling and easily accessible way. One
example is a video Greenpeace created for its campaign against Nestle, which replaces the
bars of chocolate in a Kit Kat bar with bloody orangutan fingers.25 By subverting the brand’s
motto and visuals, Greenpeace compellingly exposes the link between the targeted consumer
products and deforestation.
• Stage in-person protests: Greenpeace in particular has used in person protests both in
Europe, South America and South East Asia to highlight the link between consumer products
sold in Europe and deforestation occurring across the globe. A protest that gained
widespread media attention in Europe was led by Greenpeace in 2006 at Cargill’s port at
Santarem, in the Brazilian Amazon, to contest the company’s role in driving deforestation
linked to soy expansion in the region.26
• Reinforce grassroots campaigns: In 2010, RAN led a solidarity campaign to support
two Girl Scouts’ grassroots efforts to rid Girl Scout cookies of palm oil sourced from
Indonesia. With RAN’s help, the teenagers’ campaign gained national media coverage,
including a front-page article in the Wall Street Journal, and led to 70,000 messages to Girl
Scouts USA.27 This campaign has been described as having contributed to the pressure that
led Kellogg’s to establish, in February 2014, a zero-deforestation palm oil policy for palm oil
sourcing in February 2014.28
3. Consumer-facing leverage points pressure producers to shift away from
unsustainable practices
Directly targeting upstream actors (i.e. traders and agricultural producers) has been less effective in
effecting change than indirectly pressuring them through their consumer-facing clients, such as large
retailers, manufacturers, and food service companies. Consumer-facing companies may be less
willing than upstream players to expose themselves to reputational risk. Experts we consulted
believe that some campaigns’ practice of targeting specific companies instead of the industry at large
has been a critical component of successful campaigns.
This dynamic worked particularly well in a 2006 Greenpeace campaign against multinational soy
traders implicated in deforestation linked to the expansion of soy production in the Brazilian

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Amazon.29 Greenpeace’s report “Eating Up the Amazon” called attention to the exponential
expansion of soy production in thi region, and the trading companies it viewed as being responsible
for driving this dynamic.30 Greenpeace singled out Cargill as the worst offender, pointing to the
export port Cargill had set up several years earlier in Santarem, Para, which was the point of
origination for most of the soy produced in the Amazon exported to Europe.31 Furthermore, the
legality of the port’s establishment and operation was being contested in two Brazilian courts.32
Seeing the port as a key leverage point in the Amazonian soy supply chain, Greenpeace targeted it for
a protest.33 Although the protest yielded widespread media coverage in Europe, it did not prompt
Cargill to take action. In fact, the company reacted defensively to Greenpeace’s claims and criticism
from locals, conservationists, and other NGOs, and outright denied any involvement in Amazonian
deforestation.34
In light of this impasse, Greenpeace redirected its efforts towards McDonald’s, which it identified as
a key leverage point on Cargill, because of the companies’ longstanding and strong business
relations, and McDonald’s highly visible brand.35 McDonald’s met with Greenpeace representatives,
and when presented with evidence linking the soy it sourced from Brazil to Amazonian deforestation,
decided to take prompt action. It convened a group of UK retailers to pressure Cargill and other
major traders (including ADM, Bunge, Dreyfus, and the world’s largest soy producer, Grupo Maggi)
to stop sourcing soy from the Amazon. This led, several months later, to the creation of a two-year
Soy Moratorium, under which the traders agreed not to purchase soy grown in areas deforested after
the agreement.36 The Soy Moratorium has been of the most successful supply chain interventions
helping to halt agricultural commodity driven tropical deforestation, experts we interviewed widely
agreed.c
A similar dynamic played out in Greenpeace’s 2009 campaign against deforestation in Indonesia
linked to the expansion of palm oil plantations. When directly targeting the Roundtable on
Sustainable Palm Oil (RSPO) failed to produce results, Greenpeace targeted Unilever, accusing it of
positioning itself internationally as a sustainability leader while simultaneously sourcing palm oil
from producers aggressively expanding their operations in Borneo’s rainforests.37 In response,
Unilever agreed to support a moratorium, and adopt new sustainability certification in the RSPO.
The company also committed to sourcing 100 percent of its palm oil sustainably by 2015, which was
the first sustainable sourcing commitment of its kind.38 Other companies—including Nestlé, as
previously noted—followed suit with similar sustainable sourcing policies.d
B. Effectiveness of consumer campaigns
At their most effective, consumer campaigns have led to the creation of highly praised industry and
region-wide corporate measures such as the Soy Moratorium.39 More often, consumer campaigns
have raised awareness among corporate players of the deforestation associated with their supply
chains. Many companies have also come to see consumer campaigns as both a legitimate threat to
their brand, but also an opportunity.40 As a result of consumer campaigns, many companies have
made changes in their procurement policies. The International Institute for Environment and
c For additional information, see Section 4 on Commodity Moratoria.
d For additional information, see Section 2 on Voluntary Sustainability Commitments.

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Development (IIED) reports that “from 1996 to 2006, over 400 major corporations had phased out
commodity sourcing from old-growth forests, or agreed to purchase only certified products.”41
The IIED also asserts that in aggregate, these changes can create markets for certified products, or
products that meet specific environmental standards.42Several experts agreed that raising awareness
among corporate players, and leading some to take action, can be seen as a positive development
even if the campaigns’ end goal of halting deforestation is not reached. 43
However, several elements may limit campaigns’ effectiveness in bringing about change. IIED notes
that the well-known, international consumer-facing companies targeted by non-profits- may not
always be the largest buyers or worst offenders,44 arguably possibly letting those players off the hook.
Furthermore, the literature and experts we consulted agree that the sourcing changes of a few
companies, while representing a positive change in the industry, may not result in net forest
conservation, since the products sourced from deforested areas can simply be sold to other buyers
who are not facing sustainability demands from consumers (e.g., China, or other developing
nations).45
While there are several examples of campaigns playing a role in prompting action by governmental
and intergovernmental actors,46 overall, campaigns have not had a very significant impact in this
area.47
Current campaigns may, like boycotts, be ineffective at producing lasting consumer behavior change
in much of the population. Two additional challenges identified in the literature are the limits to how
long a topic can sustain media attention during a campaign, and consumer fatigue with recurring
campaign demands. Campaigns are described as ultimately an unreliable source of demand
generation, especially in the long term.48
Despite this, recent campaigns—like Greenpeace’s 2013 and 2014 campaigns against Proctor &
Gamble and other corporations pressuring them to commit to source palm oil that is not
contributing to clear-cutting in South East Asia—appear to have received a boost from the more
direct pressure that shareholder advocates are effecting on corporations through shareholder
resolutions. Several major companies like Kellogg’s, Proctor & Gamble, and Wilmar have recently
acceded to this pressure and taken on deforestation-free sourcing commitments.e
e For additional information, see Section 2 on Voluntary Sustainability Commitments, and Section 6
on Finance Sector Actions.

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2. Voluntary Commitments
A. Overview of strategy and dynamics among actors
Companies can make voluntary commitments through press releases, public policies on their
website, or letters, announcing their sustainability goals and their plans to implement them to the
public. This section will focus exclusively on voluntary commitments companies have made to
sustainably source agricultural commodities, and reduce the environmental impacts associated with
their agricultural supply chain (it will not go into the efficacy of voluntary private sector
commitments across sectors, which is the topic of a vast literature49).
1. Companies adopt sustainable sourcing policies in response to various drivers
Within agricultural supply chains, retailers and consumer goods manufacturers are leading the
adoption of sustainable sourcing commitments. Several palm oil trading companies have also taken
on sustainability commitments in 2013 and 2014. Drivers for voluntary commodity commitments
include:
• Civil society pressure: Civil society pressure, and more specifically, consumer campaigns,
has been one of the most powerful drivers for getting retailers and consumer facing
companies to take on commitments. Indeed, between 1996 and 2006 such campaigns drove
over 400 companies to change their sourcing policies to avoid deforestation, or other
environmental impacts.f,50 Another type of civil society pressure, more difficult to document,
may be non-publically disclosed pressure or influence of non-profit organizations on
corporations.
• Shareholder activism: Several companies that have made deforestation-free
commitments around palm oil sourcing in recent months have been influenced by
shareholder pressure under the form of shareholder resolutions. This is notably the case of
Kellogg’s and Proctor & Gamble.g
• Pressure from consumer-facing customers: Upstream supply chain actors, such as
traders, are often driven toward sustainability commitments by pressure from consumer-
facing corporate clients.51 One example is Cargill, which, through pressure from McDonald’s
and other retailers and consumer goods companies, committed to not purchase soy from
areas linked to deforestation in the Amazon.h Another example is Wilmar International, a
major palm oil processor, which announced a deforestation-free, peat-free, and exploitation-
free commitment in response notably to pressure by its major client Kellogg’s.52
• Industry platforms: Some companies have taken on commitments through industry
platforms such as the Consumer Goods Forum (CGF) (see below).
f For additional information and examples, see Section 1 on Consumer Campaigns.
g For additional information on shareholder activism, see Section 6 on Investor Actions.
h For additional information and examples, see Section 1 on Consumer Campaigns.

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• Life-cycle assessment results: Some agri-businesses and retailers have also made
commitments in response to the results of life-cycle assessments on their company’s entire
operations. Those assessments often reveal that a large portion of the company’s carbon
footprint is situated in its supply chain, and is linked to the sourcing of commodity inputs.
For example, PepsiCo UK committed to reducing the GHG emissions from its agricultural
commodities sourcing after one of its brands found that half of its carbon footprint was
connected to the sourcing of raw materials.53
A recent report highlights three top reasons retailers and product manufacturers say they take on
sustainable sourcing commitments: to minimize operational risk, to maintain a strong brand, and to
ensure the sustainability of their supply chains.54
2. Sustainable sourcing commitments vary widely in scope, ambition, and follow
through
Sustainable sourcing commitments vary widely in scope and focus. Commitments range from those
limited to a specific commodity or set of commodities, to those which focus more widely on zero-net
deforestation or overall carbon emissions. Examples include Tesco’s goal of reducing the carbon
impact of the products in its supply chain by 30 percent, by 2020,55 or the CGF’s zero-net
deforestation goal by 2020.56 Commitments also range widely in terms of timeline, with some being
set for the short term—such as Walmart’s goal to reduce 20 MMT of GHG emissions by 2015, set in
201057—and others set for further in the future—such as Tesco’s goal to be a zero-carbon business by
2050 without purchasing offsets.58
There is currently no one definition of “zero-deforestation” or “deforestation-free” used across all
sourcing commitments aiming to halt deforestation. Actors’ commitments to “zero-gross
deforestation” (e.g., the government of Brazil’s commitment in the Legal Amazon) or “zero-net
deforestation” (e.g., CGF’s commitment), can very different meanings in terms of carbon storage,
biodiversity and feasibility.59 “Zero net deforestation” could include replacing primary forests with
equal areas of reforested land, negatively affecting carbon and biodiversity. On the other hand, some
companies and NGOs have found that “zero net deforestation” or “zero net emissions” from
deforestation are more feasible targets in the short-term than zero gross deforestation.60 Civil-society
and supply chain actors have not yet agreed on a common definition.
There is a discrepancy between the number of companies who make sustainable sourcing
commitments, and companies that are truly viewed as leaders on sustainable sourcing. While
between 1996 and 2006, over 400 companies made commitments to source some of their raw
materials sustainably,61 the Forest Footprint Disclosure Project calculates that there are only
approximately 50 companies who truly know “their supply chain, [can] make sourcing commitments
and alter their purchasing.”62 Furthermore, the gap between those 50 or so progressive companies
and the rest is large. One report identified two key indicators demonstrating leadership on
sustainable sourcing commitments as being (1) that commitments be “aggressive time-bound targets
and goals for their sourcing and supply arrangements,” and (2) that companies actually follow
through on commitments taken.63 Additional key indicators include that companies identify high-
risk agricultural raw materials in their supply chain, and explicitly focus on reducing emissions at the
production level. 64

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A recent trend in sustainable sourcing are the commitments numerous companies have made in the
past year on ridding the palm oil in their supply chains of any connection to deforestation. Major
consumer goods companies like Procter & Gamble, Kellogg’s, and processor Wilmar have put in
place internal policies that they will not purchase palm oil proceeding from areas deforested.
Greenpeace and other organizations have praised Wilmar’s “deforestation-free, peat-free, and
exploitation-free” commitment for being ambitious—although Greenpeace has said it will be
monitoring closely to see if the company follows up through its word.65
3. Industry-led platforms have the potential to create positive aggregation effect
Industry-wide platforms such as the Consumer Goods Forum (CGF) emerged in our research as
having a strong potential role to play in getting lagging companies to make and implement
commitments, and catalyze industry and supply chain-wide transformations. The Dutch Task Force
on Sustainable Palm Oil and the Belgian Task Force on Sustainable Palm Oil are additional examples
of commodity specific industry platforms that have made commitments to source sustainable palm
oil for their members, which in this case represent major Belgian and Dutch end-users of palm oil.
These groups and their deforestation commitments have often been spearheaded by companies that
are already viewed as sustainability leaders.
Scale is credited as the most attractive element that these industry platforms and groups can offer.
For example, the CGF, with 400 member companies and combined sales of around $3.5 trillion,
pledged that its member companies would “mobilize resources within their respective businesses to
help achieve zero net deforestation by 2020.”66 This has been widely hailed as a promising and
ambitious goal, which would have great impact if the commitment is acted upon. The CGF has taken
several actions to encourage their members to implement this commitment, which include launching
the Tropical Forest Alliance 2020 with the US Government creating guidelines for the sourcing of
paper goods, and publishing a toolkit in 2013 that provides advice on how to reach the
commitment.i,67 Yet beyond these steps, there is little publically available information assessing the
progress of this commitment in the four years since it was made. Greenpeace, on its part, has
demanded the CGF be clear that its commitment “is about stopping deforestation in natural forests,
not about “net” reductions that leave the door open to replace forests with plantations.”68
In addition to industry platforms, there are groups that focus on specific aspects of enabling
sustainability throughout the supply chain. The Sustainability Consortium (TSC), for example, with
over members among universities, government agencies, civil society organizations, and over 100
members from across the supply chain—which together have combined revenues over $2.4 trillion—
creates and implements “scalable, science-based measurement and reporting systems,” to improve
consumer product sustainability. Wal-Mart and other members of TSC and CGF then use TSC’s
“Sustainability Toolkit” to measure sustainability throughout their supply chain.69,70 TSC focuses on
improving the sustainability of several agricultural commodities, including beef, cocoa, seed oils, soy,
and coffee.71
Another set of platforms companies can engage in agricultural supply chain sustainability are
commodity roundtables.j Most industry-led groups consult on a more ad hoc basis with civil society
i For additional information, see Section 7 on Government Regulations and Policies.
j For additional information, see Section 3 on Commodity Roundtables and Certification.

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groups,72 while in roundtables, civil society groups typically have full membership and voting rights,
and several roundtables were co-founded by civil society organizations.73 An additional distinction
between these industry groups and roundtables is that roundtables focus on one commodity or
practice (e.g., organic food).
An overlap exists between roundtables, and industry groups or individual corporate commitments.
Companies that make voluntary commitments and participate in industry groups may also be
involved in roundtables, as is the case with Unilever, a founding member of roundtables for palm oil
and soy. And even if companies do not actively engage in roundtables, they might use the
certification schemes advanced by roundtables to guide their commitments. For example, the CGF
recommends that its members who want to achieve zero-deforestation in palm oil, soy, and beef,
participate in the corresponding roundtables.74
B. Effectiveness of voluntary corporate commitments
The private sector has an important role to play in addressing the environmental impacts of
agricultural production, such as deforestation. We encountered a range of experts’ opinions,
however, about how effective and significant their efforts have been. Some thought that the current
engagement of companies in soft commodity supply chain sustainability was promising, and
presented an enormous contrast with the lack of corporate awareness 15 years ago.
Other experts, however, were more skeptical about corporate engagement, and specifically about
voluntary corporate commitments. Several experts saw a lack of follow through on commitments
that companies voluntarily make. The impression that CGF member companies are waiting until
much closer to 2020 to actually work on the zero-deforestation commitments they agreed to in 2010
was the most substantial case cited. Several experts also singled out palm oil as a commodity where
there has been (at least until present) a lack of follow through, and confusion between whether there
is undersupply or under-demand for sustainable palm oil. Several reasons were advanced to explain
the discrepancy between sustainable sourcing policies and action, including a lack of motivation and
accountability on the part of the company, and a use of commitments as a public relations tool.
Other experts, however, believed that companies make sourcing commitments in good faith, but face
serious challenges when it comes time to implementing the commitments. These challenges include
difficulties in tracing sustainable commodity back to the farm, in engaging upstream traders, and in
actually effecting behavioral change at the plantation level. In addition, some experts believe that
considerations like cost are still taking precedence over sustainability.
An additional sentiment that emerged from our conversations with experts is that even if individual
companies were to follow through and implement the sustainable sourcing policies they had agreed
to, the overall impact of such actions might still be insufficient to counterbalance the rising demand
for commodities from emerging markets such as China, which have not demonstrated an interest in
sustainable sourcing.

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3. Commodity Roundtables and Certification
A. Overview of strategy and dynamics among actors
Commodity roundtables are voluntary, multi-stakeholder, market-based strategies designed to
improve the environmental and socio-economic impacts of agricultural products throughout their
supply chains. Roundtables bring together businesses across the value chain (including producers,
traders, manufacturers, and retailers), financial institutions and investors, and environmental and
social non-governmental organizations. Some roundtables create certifications their members must
abide by, while others solely discuss best management practices.75 For example, while the Global
Roundtable for Sustainable Beef (GRSB) is working on principles and criteria, there is “no plan to
develop a seal, certification, or comparable standard.”76
Roundtables have made positive strides towards mainstreaming issues around sustainable
sourcing,77 improving on-farm practices, tracking commodities throughout their supply chains, and
meeting company commitments for sustainably-sourced commodities. Their long-term, large scale
effectiveness remains unclear, however.
1. Roundtables aim to transcend niche markets and attain industry-wide
transformation
The first roundtables, founded in the 1990s, focused on issues, such as labor rights for the Fair Trade
Federation, or sectors, such as forestry for the Forest Stewardship Council (FSC). They created niche
markets for consumers who were willing to pay price premiums for sustainable products. The past
several years has seen the creation of roundtables that focus on agricultural commodities, such as soy
(Round Table on Responsible Soy (RTRS)), palm oil (Roundtable on Sustainable Palm Oil (RSPO)),
sugar (Bonsucro), or biofuels (Roundtable on Sustainable Biomaterials (RSB)). This new generation
of roundtables strives for market transformation, setting pre-competitive standards that all
companies must fulfill before they can access markets of countries and retailers, instead of filling a
niche for environmentally conscious consumers.78 Roundtables have evolved to become less
“prescriptive” and more “performance-based,” assessing the end result while remaining neutral to
technology and methods, and seek greater industry engagement.79
2. Roundtables create credible, traceable, and verifiable standards
Certifications create principles and criteria (P&C’s) that their members must follow, covering
environmental categories such as deforestation, biodiversity, water management and chemical use,
and social categories such as labor rights, operational health and safety, and local and indigenous
people rights. Certifications also require that members comply with all applicable local, national and
international laws, and allow countries to submit national interpretations of the P&C’s. Internal and
external third party audits are also required in most certifications to ensure compliance. Corrective
actions must be completed if violations are found. Certification standards also must have sanctioning
mechanisms that provide consequences for non-compliance, usually categorized as major and minor
non-conformities, which can result in demands for corrective actions, or suspension or expulsion
from certifications.80

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To strengthen their credibility, certifications can join accreditation bodies such as the ISEAL
Alliance, the global association for sustainability standards, and create and review their criteria
according to ISEAL’s Codes of Good Practice.81
Commodities must also be traced to validate that they are certified. Full traceability can be
expensive, so many certifications offer different supply chain systems with different levels of
traceability. At the highest level of traceability, companies must trace commodities throughout the
entire supply chain (termed “Chain of Custody” or “Identity Preserved”). Some supply chain
strategies allow companies to mix certified commodities with a certain amount of uncertified
commodities (e.g., FSC-mixed, or Mass Balance for RSPO) while others allow companies to buy
certificates that represent a certain volume of sustainable product and can offset unsustainable
sourcing (e.g., Green Palm Book and Claim certifications for RSPO). One report found that newer,
more mainstream certifications increasingly use low-cost traceability systems, book and claim and
mass balance, and fewer identity preserved systems than older certifications.82
3. Roundtables engage with companies: common principles or lowest common
denominators?
Certifications are voluntary and rely on consensus among companies, NGOs and other stakeholders.
Therefore, certifications must strike a balance between engaging a wide range of stakeholders and
maintaining the rigor of their standards. Sometimes consensus cannot be reached, which can result
in the loss of members or even fragmentation into new certification bodies. For example, the
criterion around deforestation for RTRS was so controversial that no consensus was found, and the
members resorted to majority voting. Producers argued that they should be compensated for the
opportunity cost of forgoing deforestation on their farms, and when this was not approved, the Mato
Grosso’s State Association of Soybean Producers (APROSOJA) withdrew from RTRS.83 In the case of
forestry, many producers opposed the stringency and control of FSC standards, and broke off to form
alternative, producer-backed schemes such as the Sustainable Forestry Initiative (SFI) created by the
American Forest and Paper Association (AF&PA).84 Government-mandated certifications, such as
Indonesian Sustainable Palm Oil (ISPO), have also been created to compete with international
standards.85
Some argue that certifications benefit certain companies over others. Small landowners are more
constrained by the costs of certifications and fluctuations in premiums than large companies that
have achieved economies of scale.86,87,88 Producers feel that they bear most of the costs of
certification, while downstream companies receive the largest portion of price premiums.89,90
Companies from developing countries are also disadvantaged, lacking strong national forest policies,
management capacities, domestic demand for sustainable products, and local certification bodies,
requiring them to pay travel costs for auditors. Although roundtables have attempted to address
these issues, creating step-wise approaches and group certifications to reduce upfront payments,
costs remain a substantial barrier for many companies.91
4. Roundtables engage with NGOs: reinforcement and obstruction
NGOs have different strategies for engaging with roundtables. Some NGOs, such as WWF and
Rainforest Alliance, take an active role from within, helping create and shape certifications. FSC
accredited The Rainforest Alliance to provide capacity building and auditing services and certify new

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FSC members. WWF also promotes certifications and campaigns against companies that are not
active in roundtables. For example, WWF’s “Palm Oil Buyer’s Scorecard” commends companies for
making commitments to RSPO, while exposing others for not buying enough certified products.92
NGOs also create buyers groups, like WWF’s Global Forest Trade Network, which brings together
FSC producers and sourcing companies to link supply and demand.
Other NGOs prefer to remain on the outside of roundtables, campaigning against certification
systems and their members whom they believe are committing “green-washing,” or leading
consumers to believe that their products are sustainable without real actions behind their labels.
Greenpeace published various papers criticizing RSPO for “having standards that are not only too
weak to begin with, but are habitually ignored by its members, who continue to destroy rainforests
and peatlands for palm oil.”93 More than 250 large and small sustainable farming, social justice, and
rainforest preservation groups worldwide signed a Letter of Critical Opposition to RTRS in 2009,
arguing that RTRS principles and criteria are too weak.94
Campaigns against roundtables can have very different results. Opposition to RSPO appears to have
strengthened the roundtable’s environmental criteria and the accountability of actors,95 while
pressuring companies to go beyond certification. The Palm Oil Innovation Group (POIG) was created
by Greenpeace, WWF, and producers such as Golden Agri-Resources in June of 2013, and discusses
ways to exceed the ambition of RSPO principles and criteria.96 In the case of RTRS, many NGOs are
opposed to the standard itself because they believe it promotes genetically modified soy
monocultures and large agro-businesses, and they organize to obstruct the progress of RTRS.97,98
5. Roundtables engage with government: a nascent relation
Although certification systems have been promoted as “private sector regulations,”99,100 governments
can play a direct or indirect role. Governments can create legal foundations for certifications, since
certifications require members to follow international, national and local laws. Governments also
protect property rights and prevent illegal activity, which is fundamental to certifications.
Governments can also play a more active role in certifications. They can provide funding and create
trade incentives for certifications. Some governments, including Denmark, Japan, and New Zealand,
have also established their own procurement policies that favor or require certified products.
Governments can also create their own certification systems, some of which are mandatory (e.g., the
Indonesia Sustainable Palm Oil certification (ISPO)). USDA standardized the criteria for organic
products by requiring producers to be certified under their label. Although government involvement
has strengthened certifications and increased uptake in some cases, it can also weaken certifications
by offering less stringent criteria.101
Recently, efforts have been made to further integrate public and private initiatives that have been
working separately to reduce deforestation.102 The RT-REDD consortium brings together four NGOs
(IPAM, Solidaridad, WWF-US, and Forest Trends), three roundtables (RTRS, RSPO and Bonsucro)
and the private company Unilever to discuss synergies between roundtables, domestic policies, and
the jurisdictional market mechanism Reducing Emissions from Deforestation and Forest
Degradation (REDD+).k,103
k For additional information, see Section 8 on Carbon Markets and REDD+.

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B. Effectiveness of commodity roundtables and certification
Commodity roundtables are still relatively new and under development, so there is still a limited
amount of data to quantify their impacts on the environment and society.104 In addition, many
certification systems don’t yet have adequate monitoring and evaluation systems in place to quantify
impacts.105 One report identified the need for new cost-effective assessment tools that can be easily
applied by auditors and verifiers.106 Most studies that do exist lack counterfactual evidence—they are
only able to determine correlation and not causation because they do not establish a baseline for
environmental effects before and after certification at one location, instead comparing uncertified
and certified plantations.107 Therefore, more research should be collected to assess the real impact of
certifications.
Certifications can have substantial impacts at the management unit, prompting members to protect
forests and biodiversity on their property and correct practices to comply with certification.108,109 As
one example, Rainforest Alliance found that standards had positive, measurable impacts on
biodiversity, water protection, and economic gains for workers. 110 Therefore, if standards are strong,
they can drive improvements in their members operations. However, some certification schemes do
not have criteria that directly address deforestation or carbon emissions, and others only prohibit
clearing of primary and high conservation value forests, while allowing expansion into secondary
forests and shallow peat forests.111 The State of Sustainability Initiatives Review 2014 found that
criteria of new standards had reduced depth and breadth compared to older certifications in order
increase market uptake.112 In addition, the impact of certifications at the landscape scale and in the
long-term is unclear due to a lack of data and low market shares.
1. Although roundtables have not yet transcended low market share and
consumer demand, there are reasons for optimism
Lack of data on the impact of roundtables often means market share—or the percent of the total
commodity on the market that is certified—is used as a proxy, following the reasoning that
certifications can only have an effect if they are adopted. The theory, championed by WWF, is that
because markets are ultimately controlled by a “handful” of companies, only a small percentage of
the market needs to be certified to cause a market transformation, sending feedbacks throughout the
supply chain.113
The total annual growth rate of certified commodities was 41 percent in 2012, compared to 2 percent
growth for conventional commodities, exemplifying rapid growth of new markets.114 Still, most
roundtables comprise a small share of the market for a specific commodity. Even FSC, an older
certification established in 1994, only had a market share of 10 percent for wood and 5.6 percent for
fiber as of July 2012.115 More recent certifications have had a faster rate of implementation—RSPO
certified 14 percent of palm oil after 5 years, while Bonsucro certified 2 percent after 3 years and
RTRS certified 0.2 percent after 2 years116—but their production scale is still too small to cause a
market transformation. In addition, there is a gap between supply and demand. Across all
commodities, only an average of 44 percent of standard compliant production was taken up by the
market, while the rest was sold as unlabeled commodities without a price premium.117
Certification may face a lack of demand for various reasons. First, many of the commodities, such as
soy, palm oil, sugar, and paper used for packaging, are small ingredients in complex products, and

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are not consumer-facing. Several experts interviewed referred to coffee as example of a successful
transition from niche to mainstream (at 40 percent of global production certified in 2012118), but it is
a single ingredient and is more of a “luxury product.” In addition, there is an attitude-behavior gap,
where consumers claim that they would buy environmentally friendly products at a price premium,
but in practice, price is the most important aspect of consumer decisions. Even in environmentally
sensitive European markets, consumers are more concerned about health risks from GMOs and mad
cow disease than environmental issues such as deforestation.119 Finally, the multitude of
certifications can form an “alphabet soup” that confuses consumers. Ecolabel Index tracks almost
450 ecolabels, or sustainability labeling systems, which include the certification schemes mentioned
here.120
An increase in demand for certified product could occur as companies make public commitments to
source 100 percent certified products. For example, 92 companies have committed to source certified
palm oil by 2015 or sooner,121 so demand for certification should increase as corporations finish
planning and start living up to their commitments.
2. Niche voluntary markets could let outsiders off the hook
Because roundtables cover only a small segment of the market for a specific commodity, there is
potential to excuse “bad actors” for unsustainable practices. Roundtables focus on international,
environmentally conscious markets, while much of production is for domestic consumption or
export to China and India to meet these developing countries’ rapid consumption growth rates.122
The only disadvantage to not being certified is an inability to access niche markets and price
premiums, and in many cases significant price premiums have not materialized.123 As a result,
farmers who are close to complying with deforestation regulations are more likely to get certified, as
opposed to farmers who are causing more damage and have a higher opportunity cost from changing
their behavior. Certifications could even have unintended negative impacts. For FSC, experts have
argued that market exclusion of non-certified forest products could reduce the value of standing
forests, leading to intensification of unsustainable practices or conversion of natural forests to
agriculture.124 In the case of seafood, the role of certification bodies in marketing could deflect
attention away from the key solution of reducing consumption,125 an argument that could also be
applied to beef.
3. Assessing long-term, landscape-scale impacts on the environment
While certifications can have substantial impacts at the farm level,126 they may not be as effective at
addressing landscape level issues such as deforestation, biodiversity and water quality.127,128 Some
certifications don’t have criteria that directly address deforestation. In addition, low participation in
certifications makes it difficult for these schemes to conserve continuous forest habitats. WWF has
identified the need for certifications to move “from niche to norm,” increasing uptake of certified
products.129 One assessment suggested that even if farm-level approaches were aggregated across an
entire region, they would not be as cost-efficient or effective at addressing risks beyond the farm-
level as coordinated, landscape-scale approaches.130 Roundtables were originally designed to fill a
gap in governance of natural resources. In order to reach the landscape scale, roundtables need to be
accompanied by and integrated with strong government policies and company commitments.131, 132

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4. Commodity Moratoria
A. Overview of strategy and dynamics among actors
Over the past decade, pressure from civil society has led to the implementation of several sustainable
commodity moratoria, through which a significant proportion of an industry agrees to halt
purchasing agricultural commodities linked to deforestation in a specific area.133, 134 Moratoria have
occurred on different points along the agricultural supply chain. Dutch end-user companies of palm
oil have agreed to a moratorium through the Dutch Task Forces on Sustainable Palm Oil (launched
in 2010), while the Brazilian Soy Moratorium (launched in 2006) and the Brazilian Beef Moratorium
(or G4 Agreement) (launched in 2009) were taken on by soy trading companies and slaughterhouses,
respectively. Moratoria can contribute to improved sustainability in two ways: “directly, by affecting
producer and processor behavior in the long term (e.g., by shifting production onto low-carbon
land), or indirectly, by buying time for alternative governance mechanisms (e.g., financial incentives)
to be implemented.”135
This section will focus primarily on the Soy Moratorium (hereafter referred to as ‘the Moratorium’),
the longest standing and arguably most successful moratorium—and, in the opinion of many experts
we interviewed, the most successful voluntary measure to address the environmental impact of any
commodity. It has won extensive praise, as well as study and scrutiny. The Soy Moratorium also
offers an opportunity to discuss questions critical to moratoria and the other strategies analyzed in
this paper: the long-term durability and replicability of strategies, and the interaction between
voluntary and regulatory strategies.
1. An unlikely and innovative partnership joins environmentalists and industry
The Soy Moratorium is a pledge by Brazil soybean industry groups ABIOVE (Brazilian Association of
Vegetable Oil Industries) and ANEC (National Association of Cereal Exporters) to not purchase soy
grown in the Brazilian Amazon Biome on land deforested after July 2006. ABIOVE and ANEC’s
members purchase over 90 percent of soy in Brazil, and include the largest global soy traders—ADM,
Bunge, Cargill, and Dreyfus Commodities. The Moratorium was initially put in place for two years. It
has since been renewed at annual or biennial intervals, at first due to its success, and in more recent
years in response to hikes in deforestation, and as a safeguard during the implementation of Brazil’s
new Forest Code (passed in 2012).
The Soy Moratorium was established in response to growing civil society pressure in the early 2000s
to stop the rampant rise in deforestation in the Brazilian Amazon driven by soy production. Although
cattle ranching has been the main driver of deforestation in the Brazilian Amazon since the 1990s,136
from 2001 to 2005 soy planting tripled in this region, catapulting this crop into becoming a
significant driver of deforestation. At its peak in 2003, soy was responsible for 18.5 percent of
deforestation in the Brazilian Amazon.137
The Moratorium was specifically catalyzed by a campaign Greenpeace targeted McDonald’s with in
2006. Greenpeace publicly accused the company of being complicit in deforestation by purchasing
soy from Cargill, which sourced part of its product from the Brazilian Amazon. McDonald’s promptly

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brought together a group of retailers to pressure Cargill and the other major soy traders to stop
sourcing soy directly linked to deforestation.l
In response, Cargill joined ANEC and ABIOVE’s other members to form the Soy Working Group
(SWG), along with international and Brazilian NGOs: The Nature Conservancy (TNC), World
Wildlife Fund (WWF), Conservation International (CI), Greenpeace, the Institute for Amazonian
Research, and the Amazonia Defense Front. The SWG launched the Soy Moratorium in December
2006.
The Soy Moratorium is a highly innovative and unlikely partnership between global agri-business
and environmental groups. Three additional groups also participate in some form or another in the
Moratorium:
• The Brazilian State: Although the Moratorium is a voluntary, non-governmental initiative, the
satellite monitoring activities integral to tracking compliance and progress depend on the
Institute of Geography and the Brazilian government’s Space Agency’s (INPE) high quality,
frequently updated remote sensing imagery. This data is used to determine which areas have
been deforested prior to 2006, and which areas have been planted with soy after this date. This
information is subsequently validated by fly-over analysis and fieldwork.138 The Brazilian State
became an official partner of the Moratorium in 2008.
• Global retailers and consumer goods companies: As described above, McDonald’s played
a critical role in catalyzing the Moratorium. Other retailers and industry groups such as Walmart,
Carrefour, Marks & Spencer, Sainsbury’s, Kraft, and the Consumer Goods Forum have
consistently and publically expressed support for the Moratorium. While not official partners in
the Moratorium, they benefit from it, as it offers a means to meet their sustainable sourcing
commitments and the demands of their European customers for zero-deforestation soy in a way
that is credible, rigorous, and without a cost to them in the way certifications do.
• Brazilian soybean farmers: While no SWG partner directly represents soy farmers in the
Brazilian Amazon, satellite data indicates farmers have overwhelmingly complied with the
Moratorium.139 Under the Moratorium, if found non-compliant (that is, if found to be growing
soy on land deforested after 2006), farmers lose their buyers, as well as the credit and fertilizer
large trading companies provide them, more rapidly and at a lower cost than the Brazilian
government.140
2. The Soy Moratorium earns extensive praise
The Moratorium has been heralded as the most successful intervention in reducing the deforestation
linked to soy in the Brazilian Amazon, and one of the most—if not the most—effective voluntary
initiative implemented to address the environmental impacts of agriculture, across any commodity
by many experts interviewed for this report.
Many credit the drastic decline of soy as a driver of deforestation in the Brazilian Amazon after 2006
to the Moratorium. An annual assessment by INPE in 2012 found soy planted on only 0.41 percent of
l For a more detailed account of this campaign, see Section 1 on Consumer Campaigns.

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land deforested after 2006 in the Brazilian Amazon forest biome.141 This is widely considered as
being an insignificant level, especially compared to the 18.5 percent of deforestation that the
expansion of soy cultivation caused in 2003.142 Similar monitoring results led Brazil’s Minister of the
Environment to declare in 2009 that soy was no longer a major driver of Amazonian deforestation.143
The Moratorium has also been praised for producing these results without stifling soybean
production in Brazil—in fact, the country’s soy exports have increased by 230 percent since 2006.144
A study of the Southern Brazilian Amazon indicates that “decoupling” of soy production and
deforestation took place after 2005. Starting at this time, soy production expanded primarily onto
pasture, and also experienced significant yield increases.145
While experts interviewed see the Soy Moratorium as a complimentary measure to other voluntary
and governmental efforts to halt deforestation, many believe the Moratorium has been more effective
than other strategies. A major reason is that unlike the Roundtable on Responsible Soy (RTRS), the
Moratorium is an industry-wide initiative. As traders responsible for over 90 percent of total market
share agreed to the Moratorium, this has helped avoid the “leakage” that could occur if farmers who
did not want to comply with anti-deforestation requirements sold their crops to other buyers.
The Soy Moratorium is also considered to have helped effectively and rapidly fulfill the Brazilian
government’s objective to halt deforestation, a goal outlined in Brazil’s Forest Code. The Forest Code,
which has been in place since 1965, mandates that farmers in the Amazon Biome conserve under
forest cover 80 percent of their land. Enforcement of this progressive law has been lacking, however,
in part because extensive resources are needed to enforce it over a vast territory like the Amazon
basin.146 One study argued that by making the cost of non-compliance for farmers high, the Soy
Moratorium transformed what was legal under Brazil’s Forest Code (deforesting 20 percent of a plot
in the Brazilian Amazon) into something de facto illegal, thus supporting the government’s
deforestation reduction goals, and demonstrating the power a “soft” (or voluntary) governance
mechanism can have on transforming the environmental impacts of agricultural commodity
production.147
Environmental groups, including Greenpeace and the Union of Concerned Scientists, have spoken of
the Moratorium in particularly enthusiastic terms.148 Beyond the obvious results of deforestation
reduction, the Moratorium can also be viewed as a symbolic success for green groups. The
Moratorium is a testament to environmental NGOs’ power to successfully influence powerful agri-
businesses to change. This has been accomplished through grassroots consumer-driven campaigns
that attack global companies’ public image, and by working closely with these companies to achieve
transformational change, in this case the elimination of soy as a major driver of deforestation in the
Brazilian Amazon.m While environmental groups work with many individual companies and industry
platforms to improve environmental outcomes around global agricultural production, the Soy
Moratorium is a remarkable partnership in that environmental groups succeeded in getting an entire
industry to comply with an aggressive zero-deforestation sourcing measure.
The apparent success of the Soy Moratorium has resulted in green groups championing the
replication of the strategy for other commodities and in other areas. In 2009 Greenpeace successfully
campaigned for the Brazilian Beef Moratorium or G-4 Agreement, under which Brazil’s four largest
m For additional information, see Section 1 on Consumer Campaigns.

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meatpackers, representing about 25 percent of the market, agreed to buy only from ranches in the
Brazilian Amazon demonstrating no deforestation after 2009.149 Greenpeace unsuccessfully pushed
for a deforestation moratorium from the palm-industry in Indonesia, although the Indonesian
government established a country-wide deforestation moratorium in 2011.150
3. The Soy Moratorium sheds light on indirect land use change and leakage
Enthusiasm for the Soy Moratorium it is largely due to the large territory it covers, the Brazilian
Amazon biome, which allows it to avoid leakage within its boundaries. Several experts we
interviewed were concerned, however, that the Soy Moratorium may have led to leakage outside of
its boundaries—that in response to the restrictions imposed within the Brazilian Amazon, some soy
production may shift to adjacent territories not covered by the Moratorium, including the rest of the
Amazon and Brazil’s Cerrado region. If this is true, the Moratorium’s effectiveness may be
overstated.
One study conducted in the Brazilian state of Mato Grosso, which straddles the Amazon and Cerrado
biomes, found no evidence of substantial direct leakage of soy production within that state, nor from
the state to other regions in the short term. The researchers emphasized, however, the possibility
that leakage may occur in a lagged manner, and/or in more distant geographies.151 While the
literature on leakage is inconclusive, and larger-scale studies do not yet exist, one expert consulted
believes it probable that due in part to the Soy Moratorium, soy cultivation has increased in the
Amazon outside of Brazil, where the regulatory environment is weaker.152
Experts also believed that the Soy Moratorium—being a single-commodity focused initiative—does
not account for the indirect land use change (ILUC) it may be driving. After 2006 the expansion of
soy cultivation in the Brazilian Amazon took place primarily on cattle pasture, which experts argue
may have resulted in pushing expansion of cattle production elsewhere in the Amazon biome, or into
the adjacent Cerrado region.153
B. Effectiveness of commodity moratoria
As described above, the Soy Moratorium is widely praised as playing a major role in the decline of
soy as a driver of deforestation in the Brazilian Amazon in the past decade, even while its impact
beyond this region remains an open question.
Some argue, however, that the apparent success of the Soy Moratorium is the result of specific state
and market conditions, and caution against the replication of moratoria without taking into account
the existence of the necessary enabling conditions. Furthermore, the Brazilian industry’s decision to
terminate the Soy Moratorium in December 2014 highlights its fragility as a strategy to protect
forests in the long term.
1. Moratoria may fail in absence of critical enabling conditions
A team of remote sensing experts recently emphasized the difficulties of correctly quantifying the
importance of the Soy Moratorium to declining deforestation due to soy crop expansion in the mid-
2000s, relative to the role played by governmental, other voluntary efforts such as roundtables,154
and the market conditions at the time.155

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Some point out that the Moratorium did not flourish all by itself, but depended on upon certain state
and market enabling conditions that formed a specific historical context. One expert interviewed
insisted that the Brazilian government’s crackdown on deforestation in the early 2000s was likely a
powerful motivating force to get trading companies to participate in the Moratorium. As described
previously, the satellite monitoring of farmers’ compliance with the Moratorium—which
underpinned the venture’s successful implementation—depended on the advanced spatial mapping
capabilities developed by the Brazilian State since the 1970s with the different objective of territorial
planning.156
Experts have cautioned against replicating moratoria without the necessary infrastructure to ensure
their success. One study found that all tropical forest countries had weaker regulatory frameworks
than Brazil to protect forests, and less than 40 percent had monitoring capacity similar to Brazil.
Only two countries—Costa Rica and Malaysia—had both governance capacity and monitoring
capability similar to Brazil.157
In addition to the above state conditions, several market conditions also played a role in convincing
traders to participate in the Soy Moratorium. These include strong consumer demand for zero-
deforestation soy, a low world price of soy in 2006, the relatively low crop-productivity levels for soy
grown in the Brazilian Amazon, and the limited quantity of soy grown in the Amazon compared to
other regions in Brazil. Additionally, the high concentration in the soy industry—with ABIOVE and
ANEC’s member forming over 90 percent of the market—allowed the Moratorium to be rapidly
established.158 One expert interviewed believes the Soy Moratorium’s dependence on market
conditions that can easily shift underlines its overall fragility as a sustainable long-term solution.159
2. Uncertainty over deforestation after the Soy Moratorium’s termination in
December 2014
Recent events have highlighted the Moratorium’s fragility. Over the past few years deforestation in
the Brazilian Amazon linked to soy has increased—2011 data from INPE shows a near doubling of the
number of soybean plantations within newly deforested areas in the states of Mato Grosso, Pará, and
Rondônia in 2010.160 Such deforestation may reflect planting cycles (soy is typically only planted on
deforested land as a second crop, after several rice rotations increase), and may also reflect the
uncertainty surrounding the new Forest Code debated in Brazil’ s Congress in 2011 (and passed in
2012).161 This rise in deforestation was one reason ABIOVE agreed to extend the Soy Moratorium in
January 2013.162
Traders’ support for the Moratorium started waning by 2011, Greenpeace reported.163 The
Moratorium was renewed in January 2013 and early 2014 only with great difficulty and pressure
from environmental groups.164 In February 2014, ABIOVE announced the Moratorium will not be
renewed after December 2014, on the premise that provisions in the new Forest Code—including the
Rural Environmental Registry (CAR), which mandates that farmers register the outline of their
property with the government—will protect forests from deforestation, and render the Moratorium
unnecessary.165
Some environmental groups believe this is incorrect, for several reasons. First, the Forest Code does
not offer full protection, since it allows farmers to legally deforest 20 percent of their land, and
furthermore, historically the Forest Code’s enforcement has been lax. While the CAR will in theory

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facilitate prosecution of illegal deforestation by allowing the government to better grasp where illegal
deforestation is taking place, it will be ineffectual in the short term, since registering Brazil’s 5
million farmers will take several years.
Some Brazilian NGOs are critical of the way in which the government is operationalizing the CAR
licensing process. Farmers will be able to prepare CARs without a forest engineer, as well as go
through the process of getting Environmental Adjustment Plans (PRA)—which are meant to
regularize areas that were deforested in non-compliance with the Forest Code—based on information
they declare, without having to get it verified by the government as correct.166 Uncertainty over the
extent to which the Brazilian government will impose the new Forest Code has raised concern about
the possibility of a resulting legal vacuum, in which farmers would deforest illegally and sell the soy
grown on this land to China, who has not demonstrated the environmental reservations as
Europeans.
The Brazilian soy industry has not demonstrated extensive concern about deforestation after the
Moratorium’s end. ABIOVE admits that soy-related deforestation is likely to increase after the
Moratorium is lifted, but doubts that soy will be responsible for over 2 percent of new
deforestation.167 ANEC has suggested that were soy production to become once again a major driver
of deforestation, the Moratorium could be re-instituted.168
Greenpeace—which, as described earlier, has been deeply involved in the Moratorium and is one of
its signatories—remains concerned about the Moratorium’s termination. "In the context of
deforestation showing signs of growth and new infrastructure projects consolidating in the heart of
the Amazon to transport soybeans, the challenges continue to be enormous,” affirms Greenpeace’s
Amazon Campaign Director Paulo Adario.169

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5. Improved Agricultural Management Practices
A. Overview of strategy and dynamics among actors
Improved agricultural management practices across various commodity crops can reduce the
environmental impacts of agricultural production, including impacts on water quality and quantity,
air quality, GHG emissions, and biodiversity. These practices vary between geographies—most
noticeably between industrialized systems in developed countries, and labor intensive and
smallholder farming in developing countries—as well as between their different current stages of
adoption.
It is important to acknowledge that agricultural management practices often fit within a specific
world-view of how to create a sustainable global food system. One study described three perspectives
as emerging in this debate: efficiency oriented, demand restraint, and food system transformation.170
The first perspective holds that technological innovation and management improvements will help
reach rising and changing global food demand, while decreasing impacts on the environment. The
“demand restraint” perspective places an emphasis on challenging what it considers to be
unsustainable consumption patterns (i.e. meat-intensive diets), and the “food system
transformation” view “considers both production and consumption in terms of the relationships
among actors in the food system, interpreting the problem as one of inequality or imbalance.”171
Practices profiled in this section sit primarily within the first approach, which emphasizes efficiency.
More specifically, these practices focus on reducing GHG emissions, from both direct sources (e.g.,
methane from rice production, and fertilizer application) and indirect sources (e.g., the deforestation
associated with the expansion of soy production and cattle ranching in the Brazilian Amazon).
1. Various strategies address direct GHG impacts of agriculture
Low-carbon rice farming
Rice production has a significant climate impact. Worldwide, it is responsible for 10 percent of
anthropogenic methane emissions, or about 1.4 percent of global GHG emissions.172 Field water
management techniques have the greatest impact of all low-methane farming practices currently
identified. Some such practices, such as field flooding reduction practices, also have the co-benefit of
reducing water consumption by rice.173 Rice is the most water-intensive crop in the world,
accounting for about 35 to 45 percent of total water withdrawals for irrigation.174
These GHG-emissions reduction practices are different when applied to the industrialized rice
production in the US, than to the labor-intensive and smallholder dominated production in Asia. In
both geographies, EDF is working to help scale the implementation of practices by making them
financially viable, and thus more attractive to farmers. To do this, EDF is working to link US rice
farmers to the California carbon markets,n and is also involved in early-stage “low-carbon” rice pilot
projects in India and Vietnam.175
n For additional information see Section 8 on Carbon Markets, REDD+, and Agriculture.

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Fertilizer optimization on US commodity grain production
It is estimated that 60 percent of nitrogen fertilizer applied on commodity grain production
(primarily corn and wheat) in the US isn’t absorbed by crops.176 This excess nitrogen runs into
waterways or escapes in the atmosphere as nitrous oxide, a GHG 300 times more potent than CO2.
This makes over-fertilization the largest source of GHG emissions of US agricultural production, and
contributes significantly to water quality problems across the nation. The literature consulted
indicates that efficient fertilizer use has the highest potential for immediately reducing GHG
emissions associated with commodity grain production while also reducing costs while maintaining
or even increasing yields. It also has the co-benefit of reducing impacts on water quality.177
EDF is currently working on several proving projects that engage actors across commodity grain
supply chains—retailers like Walmart, food companies, grain processors and suppliers, and
farmers—to develop and implement initiatives that engage each level of the supply chain and expand
access to a suite of effective options that grain growers can use to optimize their fertilizer use and
improve soil health. This includes getting farmers to adopt conservation practices (e.g., cover crops
and reduced tillage), as well as join networks and use data-focused tools for evaluating and
improving nutrient use efficiency. In the case of corn, for example, fertilizer accounts, on average,
for 45 percent of a US corn farmer’s total costs, so cost savings is a key incentive for farmers to join
these networks and use effective tools for improving management.178 Other groups conducting
fertilizer optimization work include the non-profit Conservation Technology Information Center,
many major land grant universities such as University of Missouri, Cornell University, and Purdue
University, and grower organizations such as the Indiana Corn Growers Association/Indiana
Soybean Association and the Iowa Soybean Association.179
2. Practices like soy yield improvement, cattle intensification, and degraded land
rehabilitation can alleviate agriculture’s indirect GHG impacts
Soy yield improvement and land sparing
Several experts touted increasing soy yields as a method to curtail the expansion of this crop in
forested lands in the Amazon and surrounding regions, in this way “sparing land” and helping reduce
deforestation. Others, however, warned of the potential negative effects of yield improvement. These
contradicting views fall within a broader debate taking place for many years around the merits or
drawbacks of yield improvement on agricultural sustainability. One report by the Union of
Concerned Scientists provides a synthesis of the varying opinions we heard from experts:
“Studies have argued that increasing agricultural yields has prevented global
cropland area from more than doubling, with some experts considering yield
improvement as absolutely necessary to serve the projected future demand. Others
have detailed a more complex picture, with yield increases’ impact on deforestation
varying widely with other factors such as governance, policy, and incentives. They
suggest the effect may even be the reverse–that increasing yields can make
agriculture more profitable and thus promote its expansion into forest–so that
higher yields alone may not mean decreased deforestation.” 180

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These ranging views are echoed in the specific case of Brazilian soy. One study expressed skepticism
of the potential benefits of land sparing at the local level, finding evidence pointing to “a strong
positive relationship between soy yields and planted area, implying that policies intending to spare
land through technological yield improvements [such as better cultivars] could actually lead to land
expansion in the absence of strong land use regulations.”181
Another study demonstrated greater optimism for land sparing, suggesting that agricultural yield
increases could result in to reduced deforestation in “frontier” regions, given the conditions that land
is available and that policies are in place to promote efficient use of already cleared land. The authors
insist, however, that it is uncertain whether governments and industry would be capable of
containing deforestation in the Brazilian Amazon, were market pressure for agricultural expansion to
rise significantly.182
“Intensification” of livestock production in the Brazilian Amazon
Research points to livestock intensification as one of the least-cost and largest-scale strategy for
mitigating GHG emissions from beef in Brazil.183 Thus, policy interventions that intensify livestock
by reducing pasture area in Brazil could help mitigate GHG emissions in that country.184 Projections
estimate that intensification practices could lead to three or four fold productivity gains in the
Brazilian Amazon, and by increasing pasture intensification by 50 percent, Brazil could increase
production of meat for export, and thus reach its export goals without further deforestation.185
A major barrier to widespread adoption of pasture intensification is high costs. Upfront investment
in pasture management (which includes planting of pasture, machinery, and fertilizer) is
approximately double the cost of deforesting (and even more if one considers the earnings from the
sale of timber that comes with clear-cutting).186 An additional hurdle for making cattle ranching
intensification a viable strategy to reduce deforestation is the lack of rigorous scientific studies that
measure the outcomes of intensification interventions. The measurement of intensification policies is
complicated by the fact that it is only one of many factors influencing land use.187
Rehabilitation of degraded lands
Rehabilitating degraded land is another important strategy for easing the pressure on critical
ecosystems, including rainforests. Such a practice can be more profitable than converting forest. One
promising example is the 10 million hectares that have already been rehabilitated in Brazil, and the
additional 25 million hectares are planned to be rehabilitated by 2020.188 A major barrier to scaling
this practice, however, remains the lack of tenure regularization for farmers, which often results in
the clearing of forest land being a more straightforward solution. This is notably the case with palm
oil plantation expansion in Peru, where developers prefer to avoid previously cleared land because
land tenure is often unclear, and it is easier to establish tenure over State owned forests.189 In
Indonesia, clearing land also benefits palm oil plantation with timber sales.190 To date, legal and
technical barriers have prevented implementation of programs attempting to transition agriculture
onto degraded lands.191

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B. Effectiveness of improved agricultural management practices
The practices outlined in this section to reduce both direct and indirect GHG emissions from
agriculture, are in their early stages, making it difficult to assess their actual effectiveness. Only on
soy yield improvement, however, did we find contrary views, between whether such a practice would
result in land sparing and reduce deforestation, or would instead bolster expanded production.
While it is premature and difficult to assess the success of this strategy, the literature consulted
highlights several broad barriers, as well as enabling conditions that may increase adoption of
practices.
• Land tenure regularization: Poorly defined land tenure is a major barrier to more
sustainable agricultural practices. Clear land tenure is typically a prerequisite to participate
in payment for ecosystem services programs, as well as certifications of sustainable
production. It is common for poorer farmers in developing countries to have less secure
tenure and formal land title, or none at all. Additionally, land tenure clarification programs
have a history of being politically difficult and costly.192
• Government policy: Government policies can have a significant impact on agricultural
practices. For example, the Brazilian state’s policy in the 1960s-1980s was a main driver of
expansion of cattle and soy production in the Amazon. More recently, legal incentives put in
place by the Peruvian government to promote palm oil production have contributed to
deforestation from palm oil in the Peruvian Amazon, as much of the expansion has taken
place in forests.o193
• Finance: Lack of access to finance is a big barrier for smallholders, and other farmers, to
implement sustainable practices. p
• Greater agricultural innovation: The concerns around mitigating and adapting to
climate change are reigniting a focus on the importance of investment in agricultural
innovation, for example to continue improving yields, advance plant breeding, and help
crops adapt to the negative impacts climate change will have on agriculture, including a
greater risk of crop failure. Some have notably called to enhance the complementarity of
between public and private agricultural research.194
The difficulty of assessing the effectiveness of farming practices and techniques underscores the
obstacles to evaluating the ultimate success of the other strategies in different areas across the value
chain. The strategy of implementing sustainable practices on the ground, however, is a critical
element in a whole suite of strategies, as many of the other strategies profiled in this paper focus on
changing production practices on the ground.
o For additional information on government policy, see Section 7 on Government Regulations and
Policies.
p For additional information on the role of the finance sector in halting the environmental impacts of
agricultural commodities, see Section 6 on Investor Sector Actions.

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6. Investor Actions
A. Overview of strategy and dynamics among actors
There is broad agreement that for the world to meet future demand for food in a sustainable way
there is a need for significant investment in agriculture.195 Many argue that in light of the significant
decrease of public investment in agriculture of recent years, private investors have an increasingly
important leadership role to play.196 In light of this trend, this section will focus on “private” finance,
rather than on public sector finance.
There is also growing acknowledgement that new investments in agriculture need to be “climate
smart”—a phrase recently coined by the World Bank referring to practices that “seek to increase
sustainable productivity, strengthen farmers’ resilience, reduce agriculture’s greenhouse gas
emissions, and increase carbon sequestration.”197 Many in the environmental community believe that
financial players in both debt and equity markets have an important role to play in addressing the
environmental impacts of agricultural commodities, and helping to drive uptake of sustainable
agricultural production practices.
The financial sector is a relatively new arena for action addressing environmental impacts from
agricultural commodities. Here we highlight a few emerging actions in debt and equity markets, and
look at what role civil society organizations have played in promoting and scaling these trends.
1. While environmental criteria platforms are a good step toward sustainable
agriculture investments, rigor and implementation can be increased
Recent years have seen a growing trend in financial actors acknowledging the importance of
incorporating Environment, Social, and Governance (ESG) criteria when evaluating investments,
notably as a way to manage systemic and reputational risks related to environmental and social
issues. This has led financial institutions such as banks and institutional investors around the world
to come together and form voluntary platform through which they agree to public environmental
commitments. Several such platforms have a specific focus on agricultural commodities. Those
include the following:
• The Banking Environment Initiative (BEI), a group of 10 leading banks and other
stakeholders that announced in 2010 a “Collaboratory on Soft Commodities” with the
Consumer Goods Forum (CGF). This group has committed to eliminating net deforestation
and degradation from the majority of portfolios and business activities, with a focus on the
commodities that are the main drivers of deforestation—palm oil, beef, soy, timber.198
• The United Nations Principles for Responsible Investment (UNPRI), with over
1000 signatories representing over $32 trillion in assets under management, created the
Farmland Working Group and Palm Oil Working Group, and the Principles for
Responsible Investment in Farmland. The Working Group supports signatories to integrate
ESG criteria through the development of tools and guidance, while the Principles cover
identified systemic and reputational risks in the area of soft commodities, including
environmental sustainability, labor and human rights, and resource rights.199

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• The Equator Principles Financial Institutions (EPFI) requires that International
Finance Corporation (IFC) clients in agricultural commodity sectors commit to credible
voluntary standards as a prerequisite for financing.200
In the report “The 2050 Criteria: Guide to Responsible Investment in Agriculture, Forest, and
Seafood Commodities,” the World Wildlife Fund (WWF) characterizes pre-competitive
environmental platforms, such as those listed above, as the finance sector’s most notable area of
leadership in combatting the environmental impacts of agricultural commodities. WWF tempers this
praise, however, noting that “public compacts have not always translated into action, many sector
policies lack sufficient strength or scope, and existing policies do not always translate into
implementation, leaving signatories open to persistent risks and reputational attacks.”201
2. Debt market actors have several options to help finance sustainable
agricultural production
Applying sustainable criteria to lending
The WWF 2050 report urges financial institutions to apply thoughtful and scientific sustainability
criteria to their lending around agricultural commodities.202 WWF insists that certification schemes
can be important tools for investors to gauge the sustainability of the production they are
financing.203 The report notes that for some commodities, such as soy, it is becoming increasingly
common for financial institutions to provide financing only if certain sustainable production criteria
are met.204
Helping producers adopt sustainable practices
The WWF report recommends financiers not only fund agricultural activities that already meet
specific certification criteria, but also support the transition efforts of producers whose crops are not
yet certified. Financial institutions can do this by engaging their clients in “stepwise improvement
plans,” under which companies agree on an action plan to transform their production to meet
credible performance standards and certifications by a certain date.205 Several formalized programs
like these already exist—such as Soy Fast Track Fund, a fund established in 2011 by the Sustainable
Trade Initiative (IDH), an organization which deploys a $175 million co-funding grant from the
Dutch, Swiss, and Danish Governments, to finance public-private precompetitive market
transformation programs for various commodities.206 The Soy Fast Track Fund helps farmers cover
the costs and investments needed to transition to responsible soy agricultural practices, such as
Integrated Pest Management (IPM) and achieving Round Table for Responsible Soy (RTRS)
certification.207
Providing preferential financing for sustainable production
Preferential financing is an emerging practice that aims to provide incentives that encourage farmers
to comply with specific environmental performance criteria, including certification standards
developed by commodity roundtables.q One example of preferential financing is the Low-Carbon
Agriculture Program (ABC) in Brazil. Farmers that invest in GHG mitigation options and comply
q For additional information , see Section 3 on Commodity Roundtables and Certification.

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with certain environmental criteria can receive from the government attractive credit options (e.g.,
low-interest rate loans and longer repayment period). Cattle ranchers have been the main
beneficiaries so far of these loans, with “recovery of degraded pastures” the most common practice
funded.208 One report praised the ABC program’s rapid adoption—between its founding in 2010, and
2013, $ 2.3 billion were disbursed. Yet it also highlighted how it is still a marginal practice compared
to the $ 64 billion the Brazilian government committed to disburse in 2013 and 2014 to the
agriculture and livestock sector with no specific sustainability requirements, and at similar or slightly
higher interest rates.209
Finance experts we interviewed saw some opportunity for international banks to provide preferential
financing to incentivize and facilitate suppliers’ transition to more sustainable agricultural practices
and achieve certain certifications. They also emphasized, however, the difficulties the sector faces in
promoting sustainable production. For example, in the case of palm oil in South East Asia, they
believed there is too little demand for a large financial institution to provide supply chain
financing.210
Restricting access to finance
While the financial approaches described so far focus on supporting sustainable production through
positive incentives, financial actors can also use negative incentives to address the environmental
impacts of agricultural commodities and guide the transition toward sustainable production.
Restricting access to finance is one example.
Financial restrictions have, to some extent, already been implemented in Brazil for both soy and
beef. The Soy Moratorium has de facto threatened access to finance for farmers—indeed, those
farmers who do not comply with the Moratorium risk losing traders’ financial support for buying
seeds and fertilizer, which represents a primary sources of credit Brazilian farmers have access to.211
Another example of a restrictive role is the World Bank’s withdrawal in 2009 of a 90 million dollar
loan to Brazilian beef slaughterhouse Bertin to expand its operations in the Brazilian Amazon. The
World Bank revoked the loan following a report by Greenpeace linking the company to illegal
deforestation in that region.212
3. Equity market players are using shareholder resolutions and divestment to
help shift companies toward sustainable production
Two types of actions currently used by actors in equity markets include promoting investment in
sustainable production through shareholder resolutions and discouraging unsustainable production
through divestment.
Shareholder resolutions
Equity investors can file shareholder resolutions, demanding that companies in agricultural supply
chains take on specific policies and/or targets to increase procurement of sustainably produced
commodities and halt support of destructive practices, emphasizing the systemic and reputational
risk the corporation faces otherwise.213 Several sustainable investment and mutual funds, and
institutional investors such as the New York State Pension Fund, have in the past several years filed
shareholder resolutions against companies who use palm oil in their supply chain, asking them to